Anxiety and stress associated with marketing decisions can be managed, but you must take an active approach.
The reason for anxiety in marketing decisions are well-documented, but the most common is the fear of missing out – FOMO.
Many consider selling before a market reaches a price peak the ultimate risk-management mistake. Some even consider selling at any time other than at the price highs a mistake.
If that describes you, it’s time to rethink what you’re trying to accomplish with a risk-management plan.
KEEP A JOURNAL
Ignoring decisions that need to be made or throwing in the towel on a marketing year add to anxiety. Keeping a marketing journal, and having the discipline to make a daily entry, helps you do a better job of risk management, and it removes much of the anxiety associated with making a decision.
A key rule in my market analysis is to not get more bullish as prices rise or to get more bearish as prices fall. There are exceptions, especially early in a new price trend, but in mature markets, don’t let either happen.
Use the journal to document why you’ve decided to not sell – or why today was the day to make an aggressive sale. Review previous entries to give you the confidence you’ve done your homework to make an informed decision each day.
When you make a sale, note the reasons why. In the weeks ahead, look back at your notes. If prices are higher or lower than when the sale was made, your emotions should remain in check because there was a reason the decision was made.
This process also puts the responsibility for the decision squarely on your shoulders — and that’s where you want it. Leaving important decisions such as grain sales to someone else will leave you wondering if they’re doing the job. If you own the risk management, you will know the job is being done.
STAY FLEXIBLE
Price floors are a solid base for your marketing mental health. Put options, minimum price contracts and other strategies that limit downside price risk but leave upside price potential open are wonderful tools that prevent a catastrophic pricing performance.
They also give you the opportunity to end a crop’s marketing on your terms rather than throwing in the towel.
SET EXPECTATIONS
It is difficult to construct a perfect marketing plan. So, don’t demand perfection. Demand discipline to do the best job possible, but be willing to accept a misstep as long as you understand what caused the misstep. Learn from it.
In markets with elevated prices and periods of extreme volatility (sound familiar?), focus on profit. Decide when enough is enough and be willing to remove downside price risk when that level is reached. After that, day-to-day price action and marketing decisions move to next year’s crops.
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